No. 88-162
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
IN RE THE MARRIAGE OF
DALE H. MALQUIST,
. . and Appellant,
and ~ A L ~ -4-
&
SANDY J. MALQUIST,
and Respondent.
.
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APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Thomas Honzel, Judge presidinq.
COUNSEL OF RECORD:
For Appellant:
Dale M. Malquist, pro se, Lincoln, Montana
For Respondent :
Dennis G. Loveless, Helena, Montana
Submitted on Briefs: Sept. 23, 1988
Decided: November 1, 1988
Mr. Justice I,. C. Gulbrandson delivered the Opinion of the
Court.
Dale H. Malquist appeals from the findings of fact and
conclusions of law entered by the District Court of the First
Judicial District, Lewis and Clark County after remand by
this Court, in In re the Marriage of Malquist (Mont. 1 9 8 7 ) ,
7 3 9 P.2d 4 8 2 , 4 4 St.Rep. 1 1 9 3 , for further findings in this
dissolution of marriage case. Upon remand, the District
Court found that the family home and surrounding 2 0 . 1 acres
were not part of a trust and thereafter awarded such property
to Sandy J. Malquist. We affirm.
Appellant raises the following issues upon appeal:
1. Whether the District Court erred in finding that
the house and surrounding acreage were not part of the
irrevocable trust?
2. Whether the District Court abused its discretian by
making findings of fact and conclusions of law on issues not
remanded for further findings?
3. Whether the District Court abused its discretion h:.7
making findings of fact and conclusions of law which
substantially altered the Montana Supreme Court's judgment?
On November 3, 1 9 8 6 , the District Court issued a decree
dissolving the seventeen-year marriage of Dale and Sandy
Malquist. The court awarded the family home and surrounding
2 0 . 1 acres to Sandy. Dale filed an appeal on November 2 1 ,
1986. He contended that the court could not award the
disputed property to Sandy because it was held in trust for
the benefit of the two Malquist children. In July of 1 9 8 7 ,
this Court remanded the case for further findings on the
terms of the trust and for support of the distribution of
trust fund propertv.
To briefly summarize the facts, the trust fund which is
the subject of this appeal was established by an irrevocable
written trust agreement signed September 12, 1984. The trust
agreement named Sandy as the settlor, Anne Rowlins and Daryl
Malquist as trustees with the responsibility of administering
the trust, and Dale and the two children as beneficiaries.
The agreement expressly stated that the trust contained all
property itemized on the Schedule A attached to the
agreement. Sandy subsequently typed up and affixed Schedule
A to the agreement in January of 1985.
The attached schedule listed only a 1977 Chevrolet
Blazer and a checking account; no mention was made of the
family home and surrounding acreage. Respondent testified
that she erroneously listed the home as part of the trust on
the 1985 and 1986 fiduciary income tax return filed on behalf
of the trust. She did not at any time list the underlying
20.1 acres as part of the trust. Moreover, the Lewis and
Clark County Treasurer's Office addressed its notice of taxes
assessed on the property to Sandy, and not to the D & S
Trust. A trust indenture signed by the parties on November
25, 1983, indicated that Dale had deeded his interest in the
property to Sandy. Sandy did not subsequently execute a
written assignment of the property to the trust.
Following the remand hearing on December 16, 1987, the
District Court upheld the original award of the house and
acreage to Sandy. The court found that the trust contained
only the 1977 Chevrolet Blazer, a checking account, and
Dale's 1984-85 electrical contractor's license. Although the
license was not listed on Schedule A of the trust agreement,
the license itself specifically named the D & S Trust as the
owner. The court further found that Dale had orally
disclaimed his interest in the trust during the remand
hearing.
The court also ruled on the motions filed by each party
prior to the remand hearing. The court ordered Sandy to
immediately turn over to the respondent any items of personal
property listed in the motion which were still at her
residence. However, the court denied respondent's motion
that she be held in contempt should she fail to turn over -
all
listed items. Several of the items listed were either
missing or had been sold prior to the divorce decree to
provide support for herself and the two children while
respondent was incarcerated. The court ord-ered Dale to
reimburse petitioner for all monies expended on their
children's health care, but denied petitioner's motion that
Dale be held in contempt for violating the dissolution decree
by failing to pay for medical insurance for the two children
and for those medical expenses incurred by them. Judge
Honzel reasoned that Dale had been generally unable to pay
such expenses because he had faiLed to secure permanent work
following his release from prison.
This appeal followed.
The first issue raised upon appeal questions the
sufficiency of the evidence to support the District Court's
determination that the house and surrounding twenty acres
were not part of the trust. The party who asserts the
existence of a trust has the burden of proving its existence
and contents by "evidence which is unmistakable, clear,
satisfactory and convincing." First Nat'l Bank of Twin
Bridges v. Sant (1973), 161 Mont. 3?6, 386, 506 P.2d 835,
841. The respondent, as the one asserting that the house and
property were part of the trust, thus had the burden of
proving that such property was placed in trust.
A trust may be either a voluntary or involuntary trust.
A voluntary trust in relation to real property may only be
created by an instrument indicating with reasonable certainty
the subject, purpose, and beneficiary of the trust and the
trustor's intent to create the trust. Section 72-20-107,
MCA, 5 72-24-102, MCA.
In our case, an existing written trust agreement
expressly stated that the 1977 Blazer and checking account
were held in the voluntary trust. The court also correctly
found that the 1984-85 contractor's license, which expressly
listed on its face that the owner was the D & S Trust,
constituted a written instrument sufficient to indicate that
the parties intended it be held in trust. However, no such
clear and convincing evidence exists to indicate that the
house and acreage were part of a voluntary trust. Schedule A
of the trust agreement fails to list the disputed property.
Further, the trust indenture listed Sandy as the owner of the
disputed property, and the county addressed its notice for
taxes assessed on the property to Sandy.
Respondent similarly failed to prove that the real
property in dispute was part of an involuntary trust. An
involuntary trust is one which arises by operation of law.
Section 72-20-103, MCA. Two kinds of involuntary trusts
exist by operation of law: Constructive and resulting.
Constructive trusts arise because of fraud, mistake, undue
influence, the violation of a trust, or other wrongful acts.
Neither party expresses an intent to create a trust and the
court does not presume any intent. The court simply "creates
the trust to work an equitable result." Eckart v. Hubbard
(1979), 184 Mont. 320, 326, 602 P.2d 988, 991. We need not
engage in any further discussion of this type of involuntary
trust, for the record is virtually silent as to any such
fraudulent or wrongful acts which would justify the
implication of a constructive trust.
A resulting trust generally arises when:
[Tlhe parties have used ambiguous
language which the court construes as
showing a trust intent, or where the
parties have expressed no intent to
create a trust by words, but have
performed acts from which the court
infers that a trust was intended.
Eckart, 602 P.2d at 991. The trust agreement in this case,
however, does not contain ambiguous language. It clearly
states that the trust includes that property listed on
Schedule A. Further, neither party acted in such a way as to
indicate that the parties intended the house and surrounding
acreage to be held in trust. Dale and Sandy signed a trust
indenture deeding the property to Sandy, not to the trust.
Sandy, and not the trust, paid the taxes assessed on the
property.
The property clearly was not held in a resulting trust,
and the house affixed to the property likewise was not
included in such a trust. A building permanently affixed to
property generally is considered part of the realty and
passes with it. See Hauf v. School Dist. No. 1 (1916), 52
Mont. 395, 158 P. 315; see generally S 5 7'0-15-101, -103, MCA
(these sections define "real property" and "affix"). Sandy's
unquestionable lawful ownership of the land therefore
included ownership of the house affixed to it. We hold that
her later inclusion of the house, but not the land, on
fiduciary income tax returns filed on behalf of the trust was
insufficient to overcome all the evidence demonstrating that
the house and land were owned by Sandy and not by the trust.
We will not reverse the District Court's decision
unless it is clearly erroneous because it exceeds "the bounds
of reason in view of all the ci.rcumstances," as it is
unsupported by clear and convincing evidence. See, e.g, In
re the Marriage of Buxbaum (Mont. 1 9 8 4 ) , 6 9 2 P.2d 4 1 1 , 4 2
St.Rep. 2 2 4 3 . In the instant case, sufficient credible
evidence existed to support the District Court's
determination that the house and land were not part of either
a voluntary or involuntary trust. The District Court thus
did not err in its findings on this issue.
The second issue raised by appellant is without merit.
Appellant contends that the District Court exceeded the scope
of issues remanded for hearing when the court determined Dale
gave up his interest in the trust. However, the Montana
Supreme Court remanded this case for "findings to support the
distribution of the trust fund and its assets." Marriage - of
Malquist, 7 3 9 P.2d at 4 8 4 . The District Court's finding that
the appellant voluntarily gave up his interest in the trust
supports the decision to then award the trust to respondent.
The third issue raised by appellant is also without
merit. Appellant contends that the District Court
substantially altered this Court's prior judgment by failing
to order respondent to turn over all the items of personal
property listed in his motion. New evidence introduced at
the remand hearing indicated that several of the items listed
by appellant were sold prior to the divorce decree.
Consequently, any inclusion of these items in the dissolution
decree was improper, as a court only may equitably apportion
those properties and assets belonging to the parties. See
5 40-4-202, MCA. Additionally, this Court notes that the
original dissolution decree did not specifically award
appellant many of these items listed in his motion. The
District Court thus did not abuse its discretion by ordering
respondent to immediately turn over to the appellant those
remaining personal items belonging to him.
We affirm the judgment of the
We concur: